Both realists and institutionalists agree that more empirical research is needed to determine the explanatory value of institutions. This paper looks at the EU’s reaction to the 2007–2008 financial crisis for evidence that the EU mattered in shaping the behavior of its member states. Three responses at the EU level—attempts to reform EU banking supervision, the creation of European Economic Recovery Plan, and the push for the November 2008 G20 summit—are examined for evidence of the EU altering member states’ interests, calculations of interests, power, and resources. It concludes that the EU mattered only when member states were not motivated by relative-gains concerns to restrain collective action.

Through analyzing the Mexican and Salvadoran migrant communities living in the US and their remittance flows back to Latin America, this paper attempts to examine the political implications of economically empowered diasporas and how home country governments are responding and becoming more accountable. This paper explores this phenomenon’s implications on political processes through remittance delivery collaboration and reviews recent developments in Mexico and El Salvador in light of the current global economic crisis.

This paper intends to show how Comparative Cultural Economics help to understand more about the path dependencies that affect economic agents in case of brutal and severe economic downturns such as the current one. Policymakers tend then to get back to former economic models experienced as successful in the past or mainly try to avoid already experienced dangers. The actual spreading of anti-capitalist behavior in the economic and political elite itself and of deeply rooted anti-capitalist violence by the victims of the downturn is one more sign that the current economic downturn also entails a strong psychological and cultural dimension. This thesis is illustrated by short examples from France, Germany, the UK and the USA.

It has become a cliché to say that there are many forms of democracies: instead, we ask if a policy is “democratic.” With the onset of increasing economic difficulty, governments intervene in otherwise free markets. Voters tolerate corruption when rural development is secured through it. Civil rights have been restricted due to possible harm of the national economy. This essay temporarily defends such incidents from the accusation of being “undemocratic,” for such policies are often believed to be necessary to strengthen a democracy in the long run. After all, our model of democracy is not the only model of democracy, nor is it always the best for them.

Often, an unrestrained capitalism in association with globalization is blamed for causing the actual financial crisis. In this article, after a historical overview on the emergence and development of the term “Laissez-faire Capitalism,” the question of the truthfulness of the above assertion is examined. Although laissez-faire capitalism does not oppose globalization, it does not endorse the process of the last two decades. While laissez-faire capitalism champions economic freedoms and deregulated markets, it also stresses the aspect of accountability: the possibility of failure itself is essential for assessing risks. Globalization on the other hand made not only markets and players global, but also regulations and regulators, and thus constrained economic freedom. In particular, globalization played a significant role in diminishing accountability for the decisions of actors in the market.

The global financial crisis has a significant impact on euro adoption strategies in the Czech Republic, Hungary, Poland and Slovakia, as national governments use the crisis strategically in national debates about economic policies and future choices. The turmoil in Hungary was a wake-up call exposing the vulnerabilities of emerging economies as Central Europe did not prove resistant to liquidity deterioration, exchange rate volatility and direct and indirect effects of the crisis. The policy implications of the crisis on the euro adoption strategies reveal that these developments only intensified the already existing position on the euro rather than dramatically changed the attitude of the governments currently in power. Analyzing the effects of the financial crisis on Central Europe, exemplified in the issue of euro adoption, helps us to understand policy choices that politicians make and the extent to which these are being influenced by international organizations. The global financial crisis has a significant impact on euro adoption strategies in the Czech Republic, Hungary, Poland and Slovakia, as national governments use the crisis strategically in national debates about economic policies and future choices. The turmoil in Hungary was a wake-up call exposing the vulnerabilities of emerging economies as Central Europe did not prove resistant to liquidity deterioration, exchange rate volatility and direct and indirect effects of the crisis. The policy implications of the crisis on the euro adoption strategies reveal that these developments only intensified the already existing position on the euro rather than dramatically changed the attitude of the governments currently in power. Analyzing the effects of the financial crisis on Central Europe, exemplified in the issue of euro adoption, helps us to understand policy choices that politicians make and the extent to which these are being influenced by international organizations.

Sustained economic growth is a uniquely modern concept. World per capita incomes, after millennia of stagnation, only rose significantly at the end of the eighteenth century. This development first took off in Western Europe, and it has largely not taken place in sub-Saharan Africa. This divergence is due, in part, to an interconnected series of Enlightenment-era cultural trends in Europe epitomized by the rise of the developmental state based on a social contract, the increasing influence of rationality and applied science within the economy, and the encouragement of economic development by religion. These trends represented a cultural shift toward individualism in the political, economic, and religious spheres of the Western world during the Enlightenment and stand in stark contrast to Sub-Saharan Africa’s postcolonial culture of collectivism and ineffective development strategies based on Pan-Africanism and statism. As such, the prospect of future economic development in Africa along a Western path would require a cultural transformation.

By focusing on NAFTA as an intervening variable in the Mexican transition to democracy, this paper explores the interplay and the sequencing of economic liberalization and political opening that occurred in Mexico between 1988 and 2000. More precisely, its goal is to evaluate whether neo-liberalism in Mexico has steered a process of democratic transition or, conversely, if the consolidated features of the political system have remained practically unchanged despite the speed of the impressive market reforms that Mexico has experienced. As the analysis will highlight, the Salinas administration (1988-1994) adapted the ruling coalition and state-society relations to the imperatives of neo-liberalism, thus making the free-trade agreement politically viable. The result was political paralysis rather than a positive political opening. By contrast, economic liberalism under Zedillo (1994-2000) triggered an ongoing process of political liberalization, mainly by reducing the power of the presidency and by partially removing the past authoritarian legacies of Mexico. However, this paper argues that Mexico still falls short of a full-fledged democracy. The path toward democratization, although well on its way, remains uncertain and complex given the current reality of the country.

The issue of correlations among stock indices is essential for effective diversification strategies of portfolio managers. However, it is often claimed that the economic and financial integration of European markets has increased correlations between stock market indices, making it less attractive for portfolio managers to diversify among European assets. This paper examines the development of the correlation structure between country indices during monetary and economic integration in the European Monetary Union and finds that correlations increased considerably during the sample period of 1979 to 1999, and decreased again after the introduction of the euro. This paper seeks an economically sound explanation for this counterintuitive observation.

The objective of this paper is to discuss the implications of a possible improvement in the terms-of-trade for Brazil (a reversal of the controversial Prebisch-Singer Hypothesis) resulting from China's industrialization process. The paper will address, in particular, how this terms-of-trade improvement opens the possibility for a new model for Brazil's economic development, based on the export of commodities. It finds that the dual effect of lowering the prices of manufactures and raising those of commodities, brought about by China's industrial export-led growth model, will likely invalidate the declining terms-of-trade aspect of the Prebisch-Singer Hypothesis. Nevertheless, many of the implications derived from this hypothesis still deserve careful consideration.

The Italian labor market suffers from stark rigidities and high regulation. Government attempts to alleviate high unemployment through deregulation and moderate labor market reforms have met with staunch and aggressive opposition on the part of the trade unions. This paper seeks to explain how a squabble over technical issues has turned into an existential fight on the part of the trade unions, generating major social upheaval with ripple effects across the societal structure. The consequences of dislocating the breadwinner model will be considered along with the implications of a fluid labor market structure on Italian industrial relations.